Half ‘worry about lack of savings’

The Government is being urged to encourage a stronger savings culture after consumer group Which? found that nearly half of people are worried about the size of their money pot.

As the economy turns a corner, the Government should put a national savings strategy in place to help those households that can afford to put money aside to improve their ability to cope with financial shocks, Which? said.

It suggested that the strategy could be developed with the financial services industry, employers and consumer groups.

Some 49% of people are worried about their level of savings and one in three (33%) are planning to save less in the coming months, according to r esearch conducted for Which? among more than 2,100 people from across the UK last month.

Just one in seven (14%) people overall plan to save more in the coming year. One quarter (24%) of people surveyed said they have no savings at all.

This was despite the number of people who describe the UK economy as good more than tripling since 2012, rising from 8% to 25% and more than a quarter (28%) of people now saying they expect their finances to improve in the next year.

Which? said that although some people may be prioritising paying down debts, it has previously estimated that around 14 million people could be encouraged to save more. Of these, around 2.5 million do not save but could afford to.

Richard Lloyd, executive director of Which?, said: “Not saving enough leaves people more vulnerable to financial shocks. As the economy picks up, the Government must act to develop a national savings strategy.

“With half the population worried about the size of their savings pot, we also need to see banks and building societies play their part by scrapping the savings trap and freeing savers from poor value accounts.”

Which? has already launched a “scrap the savings trap” campaign, which is supported by more than 52,000 people and calls for banks and building societies to do more to help consumers get the most from their savings, including not letting customers’ money languish in poor savings accounts.

The group also wants Isa switching to be made easier and customers to be given better information on the best returns on their savings.

Which? has previously identified three main behaviours that are strongly linked to successful saving.

These are saving regularly each month, saving for a “rainy” day rather than a specific goal such as a holiday or car, and keeping savings separate from other money so the saver is less likely to dip into their pot.